Key Points
Rising interest rates drew trillions of dollars into money-market funds and other cash-like investments in the past two years, with more than $8.8 trillion parked in money funds and CDs as of the third quarter of 2023..
Investors are optimistic that with rates poised to fall, people will redirect that money and fuel markets next leg higher..
Vivek Trivedi, 37 years old, a pharmacist in Indianapolis, has around $80,000, or a bit more than 10% of his overall assets, in money-market funds and inflation-adjusted U.S. savings bonds (I bonds)..
Bond yields have declined from their peaks, but rates offered on Wall Street remain high relative to recent history, pulling cash toward money-market funds..
Money-market funds raked in cash during previous Fed-tightening cycles but didnt hemorrhage it when the central bank began to ease..
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